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The Daily News of Los Angeles

SACRAMENTO, CA — Consumer advocates fought more than four years for regulations to protect California’s 28 million cell-phone users. It took only eight months and a nudge from Gov. Arnold Schwarzenegger to make the rules disappear.

Since then, the Legislature has considered nine consumer laws that would make it easier for cell-phone owners to do such things as terminate their contracts, transfer their phones to different carriers and dispute billing discrepancies. Only one has become law.

Consumer groups and some lawmakers blame the failure of the other measures on the increasingly influential telecommunications lobby.

According to a MediaNews analysis, telecommunications companies with cell-phone divisions have contributed more than $7 million to California political campaign accounts since 2005.

“It’s a testament to the cell-phone industry’s power that the first thing Arnold Schwarzenegger did when he came into office was put people on the Public Utilities Commission who were pro-industry, anti-consumer, and immediately proceeded to tear down pro-consumer regulations that prevented cell-phone company abuses,” said longtime consumer advocate Harvey Rosenfield, author of Proposition 103, which significantly reduced insurance rates for California motorists.

Wireless industry representatives, their hired lobbyists and the Schwarzenegger-appointed public utilities commissioners are proud of their pro-business record. The proposed laws and rules, they say, are unnecessary, bad for a competitive market, burdensome, and, if implemented, will jack up cell-phone bills.

Even if some legislation is well-intentioned, said Jay Ziegler, a spokesman for the wireless industry association, known as CTIA, the measures would end up being detrimental for consumers.

He adds that the cell-phone market is the only sector of the telecommunications industry in which a customer can switch carriers if they’re unhappy with their service.

Consumers argue that’s easier said than done. Many users feel they’re being held hostage by carriers that force them into exclusive contracts with $200 in early-termination fees.

Perhaps no bill in California better demonstrates the industry’s influence than SB 831 by Sen. Alan Lowenthal, D-Long Beach.

Lowenthal’s measure would have forced carriers to prorate early termination penalties, institute a 30-day cancellation policy on contracts and stop retail stores from charging their own cancellation fees.

When the Senate took up his bill June 6, the measure drew 20 votes — one short of passage.

Shortly thereafter, nearly two dozen cell-phone lobbyists paced the hallway outside the Senate chambers, trying to influence lawmakers.

That same day, an AT&T employee political action committee donated $50,000 to the ballot initiative that would allow a number of current lawmakers to extend their terms.

The next day, on Lowenthal’s final attempt at passage, two key Democrats who’d previously expressed support for the bill turned away from it. The bill died.

The two lawmakers — Jenny Oropeza of Redondo Beach, who at the time was running for Congress, and new legislator Alex Padilla of Van Nuys — said in interviews that they disagreed with elements of the bill.

They also denied being pressured to change course, although a legislative aide and a consumer advocate said they’d spotted industry lobbyists conversing privately with each lawmaker between votes.

Of the $7.2 million contributed by telecom companies with cell-phone divisions since 2005, more than $600,000 has gone to the California Democratic Party.

AT&T, Verizon, Sprint, T-Mobile and phone maker Qualcomm have donated more than $200,000 to the campaign funds of the dozen members of the Assembly Utilities and Commerce Committee, where about half the bills met their demise.

More than $1.2 million has benefited Schwarzenegger and causes he supports, including the California Republican Party.

AT&T, which has interest in wireless phones, land-line, broadband and Internet television, far outspent its competitors by shelling out $4.5 million.

“You could argue that AT&T has a seat in the governor’s office and runs the show at the Public Utilities Commission,” said Rosenfield, an attorney who started the Foundation for Taxpayer and Consumer Rights.

AT&T‘s media relations director declined an interview request and referred questions to the wireless industry association, whose spokesman said he didn’t have information on the company’s campaign donations.

Schwarzenegger spokesman Aaron McLear denied that AT&T‘s money or any other contributions from the industry influences the governor’s office.

“We believe the PUC has done a great job protecting consumers,” he said.

Legislation Hung Up:

Over the past two years, just one of the nine most notable consumer-protection measures for cell-phone users became law. Here is a brief description of each bill as presented in its final form, which was often less stringent than the original version:

AB 610: Requires cell-phone carriers to detail charges for text messaging and Internet use. Signed into law.

AB 891: Would compel carriers that market and negotiate in languages other than English to provide a contract in that language. Still active; eligible for vote in January.

AB 1010: Would have provided 21-day grace period to rescind contract. Senate passed; failed in Assembly.

AB 1068: Would force carriers to clearly state key rates, terms and conditions. Failed in Assembly committee.

AB 1082: Would restore Bill of Rights dismantled by Public Utilities Commission. Abandoned by sponsor.

AB 2622: Would require carriers to offer 30-day grace period to rescind contract. Stalled in Assembly committee.

SB 440: Would make it easier to dispute unauthorized charges. Passed by Legislature, vetoed by governor.

SB 158: Would require carriers to “unlock” phone at end of user’s contract so it can be activated on a different network. Failed in Assembly committee.

SB 831: Would require 30-day grace period to cancel contract, prorate early termination fees, prevent stores from charging their own termination fees. Senate failed to pass.

SOURCE: MediaNews research

Cell-phone donations:

Cell-phone providers and their employees have given nearly $7.2 million to California political causes since 2005. Here is a breakdown:

AT&T: $4,520,988
Cingular Wireless: $1,220,100
Verizon: $837,688
Qualcomm: $268,049
Sprint: $233,269
T-Mobile: $107,683

SOURCE: California Secretary of State

Contact the author at: [email protected] or (916) 441-4651

Consumer Watchdog
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